Thinknear Gives Mobile Industry a “D” For Location Accuracy

Earlier this year I wrote abouta study that Thinknear conducted about the accuracy of location in mobile advertising. It revealed only a minority of mobile display ad impressions carrying a Lat-Long were accurate.

The company found that while 68% of mobile impressions had an assigned Lat-Long only a third of those were accurate to within 100 meters of that supposed location. In other words the Lat-Long was way off in most cases.

Here’s what the study earlier this year discovered:

32% of mobile display impressions with a Lat-Long were accurate to within 100 meters

42% were off by 3,200 meters or more (2 miles)

26% were off by more than 10,000 meters, which is more than 6 miles

Now the company has initiated a quarterly report and formalized the results of this study into what it’s calling a Location Score Index. Thinknear founder Eli Portnoy says the goal is to educate marketers about 1) the importance of location in mobile advertising and to 2) bring more transparency to location.

People who read this blog already understand the value of location. However, to reiterate, locally targeted ads outperform non-locally targeted ad inventory (even where national brands are involved). This has been documented repeatedly in studies from Opus Research, xAd, Telmetrics, JiWire, Verve and others. Thinknear has also previously showed this in its research.

The new Thinknear report will be issued quarterly. Initially it will convey industry wide data — in the aggregate.

Essentially Thinknear is going to grade mobile ad inventory in terms of underlying location accuracy. As indicated in the graphic above, this first report gave the industry a score of 49 out of 100. While perhaps not a failing grade it’s pretty mediocre — I’d say a “D.”

The study found some sources did a good job and others were very poor, bringing the overall average down:

[T]he industry score of 49 indicates there is a very broad spectrum of quality in the mobile ecosystem. We found some inventory sources to be relatively accurate (scoring in the high 70s), while other inventory sources were extremely inaccurate (scoring in the low 20s).

Further, there was also a broad range of location quality by app. Certain apps provided high-quality location data while others consistently provided poor location data.Over time, we expect the Location Score Index will show improvement in industry-wide location accuracy.

Publishers, networks, and other inventory sources will gain a better understanding of location technology, and marketers will demand more granular report- ing. App developers with accurate location data will monetize better and thrive.

This gets really interesting (and potentially controversial) if Thinknear starts to grade individual publishers, apps and especially ad networks. But that individual network scoring would be highly valuable to marketers for obvious reasons.

Because Thinknear is an ad network itself some might argue that there’s an inherent conflict of interest. However I believe that Portnoy and his team are genuinely motivated by a desire to advance the cause of location broadly.

Portnoy confirmed that in their tests a higher location score is positively correlated with a range of improved ad-performance metrics, including offline visits and time on advertiser site. The only metric that doesn’t positively correlate with location accuracy is CTR, which is a poor mobile ad metric and indicates very little about ultimate ad performance or conversion.

Thinknear was aided by Placed in the measurement of offline ad impact for the study.

Why is location “bad” or inaccurate in a majority of these cases? Some of it is technology. For example reverse IP lookups are still widely used in mobile (surprisingly) and those data are almost always inaccurate. In some cases there may be a kind of negligence bordering on “fraud” where a Lat-Long is generated because of perceived advertiser demand but there’s little or no underlying “location integrity” in the process.

In PC display advertising marketers are starting to demand verification that their ads were actually served and shown. That’s called “viewability.” It has become a new currency and is gaining traction. Location Score may become an equivalent kind of metric for mobile display advertising — a way for marketers and advertisers to have confidence that they’re actually getting what they paid for.